Bhopinder Singh Dhillon, J.:— Briefly stated the facts giving rise to this reference are that: this assessee-firm known as Messrs. Jagan Nath Pyare Lal of Ludhiana had ten partners who were members of the two families and came into existence under the instrument of partnership executed on March 27, 1952. Padam Kumar was a minor in the said partnership. When he attained majority on October 1, 1956, he opted to continue as a full-fledged partner and a fresh instrument of partnership, copy of which is annexure “A” with the statement of the case, was executed, on October 8, 1956, by 11 partners including Shri Rabinder Kumar, having Re. ½ share. On April 1, 1959, the partners decided to effect a change in the profits and losses-sharing ratio. A fresh deed, copy of which is annexure “B” with the statement of the case, was executed to that effect on April 1, 1959, and, consequently, an application dated September 2, 1959, for registration of the said firm under section 26A of the Indian Income-tax Act, 1922, was filed on September 30, 1959, before the Income-tax Officer, A-Ward, Ludhiana, copy of which is annexure “C” with the statement of the case. Shri Rabinder Kumar, a partner of the firm, had left India for the United States of America for prosecuting his studies on January 29, 1958. The Income-tax Officer entertained doubts as to whether Shri Rabinder Kumar has signed the deed personally in the presence of the witnesses as mentioned in the concluding paragraph of the said deed. Similarly, the Income-tax Officer also doubted the signature of Shri Rabinder Kumar on the application for registration under section 26A of the Act. The Income-tax Officer held an enquiry into this aspect of the matter as, according to the assessee, the partnership deed as well as the registration form were signed by Shri Rabinder Kumar personally. The Income-tax Officer after having held an elaborate enquiry into the matter, concluded that the deed of partnership was not genuine as Shri Rabinder Kumar had not personally put his signature on the said deed and also on the registration application as required under rule 2 of the Income-tax Rules, 1922. On these two grounds, the Income-tax Officer declined to grant the registration to the assessee for the assessment year 1960-61. The assessee feeling aggrieved by the order of the Income-tax Officer, annexure “H” with the statement of the case, filed an appeal before the Appellate Assistant Commissioner and both the findings of the Income-tax Officer were assailed. As regards the signatures of Shri Rabinder Kumar on the partnership deed, the Appellate Assistant Commissioner, after discussing the whole evidence in the case, agreed with the findings of the Income-tax Officer that the said deed did not contain the signatures of Shri Rabinder Kumar. As regards the second ground, it was contended by the learned counsel for the assessee before the Appellate Assistant Commissioner that even presuming that Shri Rabinder Kumar did not put his signature on the deed of partnership, the subsequent application for registration on which Shri Rabinder Kumar put signatures in the presence of the Income-tax Officer was a proper application which fulfilled the requirements and conditions and there remained no flaw which would enable the Income-tax Officer to object to the claim of the assessee on this ground. It was also pleaded that as per instructions issued by the Central Board of Revenue in their circular letter dated April 11, 1955, when an application for registration was defective an opportunity was required to be given to the assessee to present it again and even on that account the Income-tax Officer failed to entertain the claim of the assessee wrongly. It was further contended that even if it be presumed that Shri Rabinder Kumar had not put his signatures on the deed of partnership, it was not necessary to do so in law and the registration could not be refused merely on this ground. It was contended that the Income-tax Officer was duty bound in law to have verified as to whether there did exist a genuine firm as given out in the instrument of partnership or not.

2. As regards the contention of the assessee regarding the genuineness of the firm, the Appellate Assistant Commissioner recorded a finding that forged signatures of one of the partners on a document cannot bring into being a genuine partnership and, therefore, it was held that the firm was not genuine. As; regards the second contention, regarding filing of the application for registration at a later stage, which contained the genuine signatures of all partners, the Appellate Assistant Commissioner held that such a question did not arise when in his opinion the partnership itself was not genuine. Therefore, there was no question of the Income-tax Officer getting the application for registration rectified. The order of the Appellate Assistant Commissioner is annexure “I” with the statement of the case.

3. The assessee filed second appeal before the Income-tax Appellate Tribunal, which appeal was dismissed by the Tribunal after coming to the conclusion that the signatures of Shri Rabinder Kumar on the partnership deed as well as on the application for registration were not genuine and, therefore, the firm was not entitled to registration. The Tribunal came to the conclusion that, if the signature of one of the partners is forged, there can be no question of the document being regarded as an instrument and the document is void and no genuine partnership can come into existence under any such document. The ultimate findings recorded by the Tribunal are in the following terms:

“For all the reasons appearing, we hold that the income-tax authorities were perfectly justified in coming to the conclusion that Rabinder Kumar has not put his signature marked Q. 1 and Q. 2, that they are forged by some one else, that no genuine partnership came into existence under such a document and that the appellant was consequently not entitled to the benefits of registration..”

4. The assessee then sought a reference under section 66(1) of the Act to this court but the Tribunal refused the reference to be made, vide its order dated April 26, 1968, as in the opinion of the Tribunal no question of law arose from the said order. The assessee then applied for a mandamus to this court under section 66(2) of the Act and the court, while allowing that application, observed that out of five questions referred to by the assessee in his petition, only one question of law arose which might be referred to this court for opinion. The question framed is in the following terms:

“Whether, on the facts and in the circumstances of the case, the registration of the firm has rightly been refused?”

5. It is in these circumstances that this question is now before us for giving our opinion.

6. In order to appreciate the issues involved in the case, the provisions of section 26A of the Act and the relevant rules may be referred to.

7. section 26A of the Indian Income-tax Act, 1922, is in the following terms:

“26A. Procedure in registration of firms.—(1) Application may be made to the Income-tax Officer on behalf of any firm, constituted under an instrument of partnership specifying the individual shares of the partners, for registration for the purpose of this Act and of any other enactment for the time being in force relating to income-tax or super-tax.

(2) The application shall be made by such person or persons, and at such times and shall contain such particulars and shall be in such form, and be verified in such manner, as may be prescribed; and it shall be dealt with by the Income-tax Officer in such manner as may be prescribed.”

8. Rules 2, 3 and 4 of the Indian Income-tax Rules, 1922 (made under section 59 of the Indian Income-tax Act, 1922) (hereinafter referred to as “the Rules”), are in the following terms:

“2. Any firm constituted under an instrument of partnership specifying the individual shares of the partners may, under the provisions of section 26A of the Indian Income-tax Act, 1922 (hereinafter in these rules referred to as “the Act”), register with the Income-tax Officer, the particulars contained in the said instrument on application made in this behalf.

Such application shall be signed by all the partners (not being minors) personally, or in the case of a dissolved firm by all persons (not being minors) who were partners in the firm immediately before dissolution and by the legal representative of any such partner who is deceased, and shall, for any year of assessment up to and including the assessment for the year ending on the 31st day of March, 1953, be made before the 28th February, 1953, and for any year of assessment subsequent thereto, be made—…………….

3. The application referred to in rule 2 shall be made in the form annexed to this rule and shall be accompanied by the original instrument of partnership under which the firm is constituted, together with a copy thereof; provided that if the Income-tax Officer is satisfied that for some sufficient reason the original instrument cannot conveniently be produced, he may accept a copy of it certified in writing by all the partners (not being minors) or where the application is made after dissolution of the firm, by all the persons referred to in the said rule, to be a correct copy, and in such a case the application shall be accompanied by a duplicate copy.

Form I

4. (1) If, on receipt of the application referred to in rule 3, the Income-tax Officer is satisfied that there is or was a firm in existence constituted as shown in the instrument of partnership and that the application has been properly made, he shall enter in writing at the foot of the instrument or certified copy, as the case may be, a certificate in the following form, namely:—

‘This instrument of partnership/certified copy of an instrument of partnership, has this day been registered with me, the Income-tax Officer for………in the State of……………under section 26A of the Indian Income-tax Act, 1922, and this certificate of registration shall have effect for the assessment for the year ending on the 31st day of March 19….’

(2) If the Income-tax Officer is not so satisfied, he shall pass an order in writing refusing to recognise the instrument of partnership, or the certified copy thereof, and furnish a copy of such order to the applicants.

(3) The certificate referred to in paragraph (1) above shall be signed by the Income-tax Officer, who shall thereupon return to the applicants the instrument of partnership or the certified copy thereof, as the case may be, and shall retain the copy or the duplicate copy thereof.”

9. It is conceded by Mr. J.N Kaushal, the learned counsel for the assessee, that the finding that Shri Rabinder Kumar has not put his signatures on the partnership deed as well as on the application for registration, is a finding of fact but his contention is that on this finding alone it is not open to the Income-tax Appellate Tribunal and the authorities below to refuse registration of the firm. The learned counsel contends that merely because Shri Rabinder Kumar did not sign the deed of partnership or that his signatures were forged on the said deed of partnership, the authorities could not refuse registration as, according to the provisions of rule 4 of the Rules, the finding to be recorded by the income-tax authorities before the registration can be refused is to the effect that the said authorities are satisfied that there is or was no firm in existence constituted as shown in the instrument of partnership. The contention is that according to law it is not necessary that the partnership deed should be signed by all the partners. It is contended that there can be in existence a genuine partnership under a partnership deed, even though a partnership deed is not signed by all the members if the non-signed members have otherwise consented to the partnership as constituted under the partnership deed. It is, therefore, contended that without there being any finding that the firm was not genuine, as constituted under the deed of partnership, the registration could not be refused.

10. On the other hand, it is contended by the learned counsel for the revenue that since the partnership deed itself was incomplete, in the sense that it was not signed by Shri Rabinder Kumar and his signatures were forged, therefore, there could not be in existence any genuine firm which was entitled to be registered. It is further contended by the learned counsel for the revenue that even if this point be held in favour of the assessee even then the question referred should be answered in favour of the revenue on the ground that the application for registration was not signed by Shri Rabinder Kumar and that being the requirement of rule 4 of the Rules, the said firm could not be registered and registration has been rightly refused. But, according to the learned counsel for the assessee, this aspect of the case does not arise out of the order of the learned Tribunal and, therefore, this matter cannot be gone into by this court under the advisory jurisdiction especially when the Tribunal itself did not record a finding that the registration was rightly refused on the ground that the application for registration was not signed by Shri Rabinder Kumar. It is contended by the learned counsel for the assessee that this aspect essentially involves the questions of fact which were never gone into by the Tribunal and, therefore, this aspect of the case does not arise out of the order of the Tribunal.

11. As regards the first contention of the learned counsel for the assessee, as is apparent from the provisions of section 26A of the Act and the Rules referred to above, a firm constituted under an instrument of partnership specifying the individual shares of the partners is entitled to be registered. It is also clear that after a firm is registered, certain concessions for payment of tax under the Income-tax Act accrue to the shareholders of the firm. Under rule 4 of the Rules, the precise enquiry which the Income-tax Officer is enjoined to make is to satisfy himself that there is or was a firm in existence constituted as shown in the instrument of partnership. The sole purpose of rule 4 is to grant registration to the genuine firms which may be in existence in accordance with the instrument of partnership and in which the shares of the partners are specified. It is to satisfy these ingredients that the enquiry has to be held by the Income-tax Officer and he is not merely to see whether the instrument of partnership is signed by all the partners or not. He is to go further into the matter and has to see whether there is a genuine firm in existence as being reflected in the deed of partnership and that the shares of the partners have been specified in writing. It is also not denied by the learned counsel for the revenue that there is no requirement of law that a partnership deed should be signed by all the partners. There can be validly in existence an oral partnership, but, for the purposes of the Income-tax Act, it is specifically provided under section 26A of the Act that there should be a partnership constituted under an instrument of partnership specifying the individual shares of the partners, and the precise enquiry which the Income-tax Officer has to make under rule 4 is that there is or was a firm in existence constituted as shown in the instrument of partnership. It is not the requirement of the above referred to provisions that the firm should come into existence under the instrument of partnership, but on the other hand, the enquiry to be made is whether a firm is or was in existence as is shown in the instrument of partnership. It is no more in dispute that if there is a genuine firm in existence even under an oral partnership and the instrument of partnership is reduced into writing subsequently, but during the same assessment year, even then the firm is entitled to registration. In this connection reference may be made to the Supreme Court decisions in R.C Mitter and Sons v. Commissioner of Income-tax [1959] 36 I.T.R 194; [1959] Supp. 2 S.C.R 641 S.C. and N.T Patel and Co. v. Commissioner of Income-tax [1961] 42 I.T.R 224; [1962] 1 S.C.R 251 S.C.. Thus it would be seen that if there does exist a firm in the relevant assessment year and the said firm is in existence as depicted in the written instrument of partnership and the shares of each of the partners are specified, the firm is entitled to registration. Therefore, the enquiry to be made by the Income-tax Officer is to satisfy himself regarding all these three ingredients. The finding that the signatures of Shri Rabinder Kumar on the partnership deed were forged and that he did not sign the partnership deed himself, would not make the partnership deed itself illegal and consequently resulting in a finding that there was no genuine firm. At the most, it can be taken that this partnership deed is not signed by Shri Rabinder Kumar. In that situation, the enquiry to be directed by the income-tax authorities was to find out whether there was a genuine firm in existence as constituted in the partnership deed in which the shares of all the 11 partners are mentioned and the name of Rabinder Kumar as a partner also exists even though it be taken that he did not sign the partnership deed, but it is clear that this matter was not gone into by the income-tax authorities in this context. The whole enquiry was directed to find out whether the signatures on the instrument of partnership alleged to have been made by Rabinder Kumar were his signatures or not and the question, whether a genuine firm did exist as depicted in the instrument of partnership, was not in fact gone into from that view-point at all.

12. In a case, In re Ramlal Murlidhar3, the Full Bench of the Calcutta High Court held as follows:

“Though under section 2(14) a firm to be registered must be a firm constituted under the instrument, it is not implied thereby that in order to satisfy the requirement of the firm being constituted under the instrument a complete instrument only is intended to be valid for registration, that is to say, an instrument which does not require supplementing by other evidence but contains in itself the complete agreement constituting the partnership and by itself solely operates to create the partnership.”

13. It was observed by Rankin C.J, who delivered the judgment of the court, that it is not impossible that a firm should be constituted under an agreement, although the agreement has not been executed by all the partners.

14. Similarly, in Commissioner of Income-tax v. R. Dwarkadas and Co., it was held by a Division Bench of the Bombay High Court that it is not necessary for every partner to sign the instrument of partnership and even if the instrument of partnership has been signed by only some of them, if it had been assented to by the others who had not signed it and they had joined in putting it forward along with other partners for registration, it would be admissible for registration under the Indian Income-tax Act, 1922.

15. Thus, from what has been stated above, it would be seen that under the provisions of the Income-tax Act there can be a partnership which may be in existence in accordance with the instrument of partnership with some of the partners having assented to the partnership but not having signed the said partnership deed itself. It is from this view-point that an enquiry has to be made in order to find out whether a firm is entitled to registration or not, keeping in view the above referred to provisions of the Income-tax Act and the Rules made thereunder. But, in the present case, according to the Income-tax Tribunal, if the signatures of one of the partners are forged, there could be no question of the document being recorded as an instrument of partnership and the document is void and no partnership can come into existence. The learned counsel for the revenue could not cite any authority or advance any argument for the proposition that if the partnership deed is signed by someone else than Rabinder Kumar, the said deed itself would become void in the eyes of law especially when the signatures are owned by Rabinder Kumar himself. At the most it can be taken that the said deed was not signed by Rabinder Kumar for the purposes of the Income-tax Act and it is then that the consequences have to be seen keeping in view the provisions of the Act and the Rules made thereunder.

16. The contention of the learned counsel for the revenue that the assessee ought to have produced evidence before the Income-tax Officer that there was a genuine partnership in existence and that having not been done, the assessee must fail is without any merit, because before the registration can be refused, a finding has to be recorded by the income-tax authorities that they are satisfied that there is or was no firm in existence constituted as shown in the instrument of partnership and that finding can only be recorded if a genuine enquiry would have been directed in order to verify whether there was a firm in existence constituted as shown in the instrument of partnership, which enquiry was never directed and thus no finding was recorded by the Tribunal from that perspective.

17. Now, the contention of the learned counsel for the revenue that the question referred to this court be answered in favour of the revenue on the sole ground that the application made for registration was not signed by Rabinder Kumar as it has been found by the Tribunal that the signatures of Rabinder Kumar on the said application were also forged may be examined. In order to determine this question it has to be first determined whether this aspect of the case does arise out of the order of the Tribunal or not. If it does not arise out of the order of the Tribunal, this contention cannot prevail, but if on the other hand, the Tribunal, which is the final fact finding authority, has considered this aspect of the case and has recorded a finding, this aspect of the case may arise out of the order of the Tribunal and the legal effect of a partner not signing the application for registration has to be seen. It is no more in dispute that by enacting section 26A of the Act and framing rules in that connection, the legislature definitely sought to give a concession to the firms and any firm which seeks to get the said concession is liable to strictly comply with the said provisions. It is settled that the rule providing that the application should be signed by each and every partner personally is mandatory and the noncompliance of the said rules would entitle the Income-tax Officer to reject the application. In this connection reference may appropriately be made to Pratapmal Luxmichand v. Commissioner of Income-tax; Steel Brothers and Co. Ltd. v. Commissioner of Income-tax, Rao Bahadur Ravulu Subba Rao v. Commissioner of Income-tax and Koduri Sambasivadu & Sons v. Commissioner of Income-tax [1963] 47 I.T.R 465 A.P.. Therefore, if it is held that this aspect of the case does arise out of the order of the Income-tax Appellate Tribunal, the question referred to this court has to be answered in favour of the revenue on this ground alone.

18. In Commissioner of Income-tax v. Scindia Steam Navigation Co. Ltd. [1961] 42 I.T.R 589; [1962] 1 S.C.R 788 S.C. their Lordships of the Supreme Court held that it is only a question that has been raised or decided by the Tribunal that could be held to arise out of its order and a question when (sic) arose before the Tribunal and dealt with by it is clearly one arising out of its order. Similarly, a question of law if it arose before the Tribunal, but the Tribunal failed to deal with it, it must be deemed to have been dealt with by it, and is, therefore, one arising out of its order. Similarly, a question which is not raised before the Tribunal, but the Tribunal deals with it, that will also be a question arising out of its order. But when the question of law is neither raised before the Tribunal nor considered by it, it will not be a question arising out of its order notwithstanding that it may arise on the findings given by it. In my opinion, the question whether the application for registration could be refused on the ground that Rabinder Kumar, one of the partners of the firm, had not signed the application, was neither raised before the Tribunal nor considered by it. It is clear from the order of the Appellate Assistant Commissioner that he dismissed the appeal of the assessee only on one ground that the deed of partnership was not genuine and thus there was no firm in existence in conformity with the terms and conditions of the instruments of partnership in the accounting year. The finding of the Income-tax Officer that the firm could not be registered because the application for registration was not signed by Rabinder Kumar was assailed by the assessee before the Income-tax Appellate Commissioner especially when the plea was raised that even if the application was not signed by Rabinder Kumar, the said defect ought to have been got removed by the Income-tax Officer and especially when the subsequent application for registration, on which Rabinder Kumar had put his signatures in the presence of the Income-tax Officer, was before him, the application could not be rejected on that ground. This plea was not negatived by the Appellate Assistant Commissioner, but on the other hand, he held as follows:

“The issue regarding the filing of application for registration at a later stage which contained the genuine signatures of all the partners cannot arise. So also the question of the Income-tax Officer asking the first application for registration to be rectified. On his finding that the signature of one partner was forged, because when the partnership is not genuine it cannot be registered at all.”

19. In this view of the matter, this aspect of the case was not raised before the Appellate Tribunal either by the assessee or by the revenue. The assessee did not raise it because the Appellate Assistant Commissioner refused registration solely on the ground that the partnership deed was not genuine. Therefore, this finding alone was to be challenged by the assessee. It was for the revenue to have raised this question before the Tribunal, as is being raised now, that the Income-tax Officer could not entertain a rectified application for registration which admittedly was signed by Shri Rabinder Kumar. It may be mentioned at this stage that a subsequent application was made by the partners of the firm signed by them all before the Income-tax Officer which is annexure “G” with the statement of the case and is dated March 12, 1965. If the matter would have been raised by the revenue before the Income-tax Appellate Tribunal, the Tribunal was bound to go into the question whether the defect in the signatures of Rabinder Kumar could be rectified as was offered by Shri Rabinder Kumar who came from U.S.A to appear before the Income-tax Officer for this purpose or whether the subsequent application, which was admittedly signed by all the partners was good in fact and in law and registration could be granted on that basis. It was for the Income-tax Tribunal to have gone into this question of fact whether the second application was complete; was the defect, if any, in the application fatal; did the assessee successfully try to rectify the defect found in the application; was the Income-tax Officer justified in not entertaining the subsequent application; and was the Income-tax Officer bound to get the defect in the original application rectified in view of the circular of the Board of Revenue referred to and relied upon by the assessee. The Appellate Tribunal did not address itself to any of these questions. Therefore, it is clear that this question was neither raised before the Tribunal nor considered by it and, therefore, this question of law cannot be held to have arisen out of the order of the Tribunal notwithstanding the fact that the Tribunal did record a finding that the signatures of Shri Rabinder Kumar on the first application for registration were not genuine.

20. The only case relied upon by the learned counsel for the revenue in this connection in Balkishan Das…Applicant; v. The Commissioner Of Income-Tax, Patiala…., which is a Full Bench decision of the Punjab High Court, Chandigarh. In my opinion, the said decision is of no avail to the learned counsel for the revenue as in that case the copy of the notice was not affixed on any conspicuous place in the court-house or income-tax office whose affixture was ordered to effect service upon the assessee who refused to accept the service of the notice personally, but a finding was recorded by the Tribunal that notice under section 34(1) was sent to the assessee by registered post and the same was received by the assessee. On these facts the Full Bench came to the conclusion that since a finding of fact had been recorded by the Tribunal that the notice was received by the assessee on April 2, 1956, therefore, the non-affixture of the notice for service was not of any material effect. It would thus be seen that in that case the question of law did arise from the order of the Tribunal but as, in the facts and circumstances of the present case, I am of the opinion that the question that the registration should have been refused on the ground that the application for registration was not signed by Shri Rabinder Kumar was not raised before or decided by the Tribunal and, therefore, it cannot be said to have arisen out of the order of the Tribunal. Therefore, this objection of the revenue is to be overruled.

21. Since I have come to the conclusion that the Tribunal has misdirected itself while recording a finding to the effect that there was no firm in existence constituted as shown in the instrument of partnership, therefore, the question of law referred to us has to be answered in favour of the assessee and it is held that the registration of the firm was not rightly refused.

22. For the reasons recorded above, the question referred to this court for opinion is answered in the negative, in favour of the assessee and against the revenue, with costs.

Prem Chand Pandit, J.:— I agree.

23. Question answered in the negative.